When U.S. sales teams from Silicon Valley’s big data-labeling startups visited this year’s International Conference on Machine Learning in Seoul, Korea, they arrived prepped to court the industry’s big spenders. The data companies—collectively worth tens of billions of dollars and generating billions in annual revenue supplying training data to customers like OpenAI and Anthropic—are used to chasing AI labs that are notoriously demanding, fickle and difficult to satisfy.

They found another eager customer waiting for them: China’s AI industry.

Some Chinese companies have shopping lists. Tencent—which has previously been designated by the U.S. government as associated with the Chinese military, a characterization the company disputes— circulated with prospective vendors a detailed request for training data spanning finance, cybersecurity and one of AI’s most coveted research goals: AI systems capable of improving themselves.

While the U.S. has long prohibited China from buying the chips that power America’s top-tier AI models, it hasn’t taken the same precautions with the data required to train them. This packaged human expertise, produced by specialist networks and shaped by task designs, grading rubrics and quality controls, is part of the expensive data infrastructure that teaches models to handle difficult professional tasks like financial modeling and coding. The business is worth hundreds of millions of dollars annually and it’s helping Chinese AI models close the gap with their American rivals.

“After the compute needed to train the models, good quality data is the most important thing,” Nathan Lambert, a former research scientist at the Allen Institute for AI, told Forbes. “As we try to get models to move to new, more challenging domains, getting good data is the highest-leverage item that can make the model become viable. “

Documentation and communications from buyers at Chinese AI labs and employees from top Silicon Valley data platforms such as Surge AI and Mercor reviewed by Forbes reveal a quiet multi-hundred-million-dollar trade in training datasets. The same U.S. startups serving as suppliers to OpenAI, Anthropic, and, in some cases, U.S. federal entities, are also supplying Beijing’s top labs. Increasingly, Silicon Valley is training both sides of the AI arms race.

For Chinese AI labs chasing American AI performance, there are really only three fast-track........

© Forbes